Ben Stein How Not to Ruin Your Life

I came to a key realization about Baby Boomers, retirement, and work when I had a discussion with a group of executives of a large staffing company recently.

First, most Boomers in America are in trouble about retirement savings. One solution is for them to work longer. If they can supplement investment and pension income by work, they're that much better off.

What I really learned from the nice staffing people at Randstad is that older workers, especially older temp workers, are much prized by employers for their work ethic and discipline, have great attitudes compared with younger workers, and feel quite good about working.

I totally empathize. Work is a gift. Work organizes our days, gives us something to wake up for, and offers us a sense of achievement and purpose. Work clears the despair and fear out of our heads. To teenagers, work is a drag and a burden. To wiser heads, it's salvation.

Match Made in Heaven

So what I'm saying here is that maybe we don't have to aim at complete retirement at age 65. Maybe we would be better off planning to work part-time if our health permits from, say, age 65 to 75. My observation, respectfully offered, is that work offers both mental and physical health benefits for people of all ages.

Now, I put my economist's hat on and add this vital piece of data. Unemployment is hovering at about 4.8% of the labor force This means that there's essentially zero unemployment for experienced workers with decent attitudes in most parts of the Sunbelt, in Washington, DC, in Seattle, and in many other places. Employers have out "help wanted" signs in every store I see near my home in Riverside County, Calif. Many of these jobs provide health benefits.

I often ask employers who they're looking for and they say they love older workers. Older workers are grateful for work, show up on time, and have ethical standards. They don't just see work as a stumbling block to playing Everquest or gossiping about who's dating whom. In short, older workers know the score.

This is a match made in heaven. Now, who knows where the economy is going. But if it stays strong, even less strong than it is now, seniors will have plenty of ways to supplement their passive income with working income. I see this as a huge growth area. It's good for the economy and good for the older workers -- everybody wins.

Slightly Less Savings Needed

In addition, I would also like to offer my apologies. As many of you were kind enough to point out, I made a mistake in a recent column (see "The Cruel Truth About Retirement"). I gave an example of a woman of 40 who will be earning $100,000 per year at retirement, wanted to live on 85% of her pre-tax, pre-retirement income, and was required to save 20% of her income to get by at retirement at age 65.

As a number of my smart and polite readers pointed out, if the woman in the example is saving 20% of her pre-tax income, she's really living well on 80% of her income and only needs to replace 85% of 80% -- or (as I calculate it) 68% -- of her pre-tax, pre-retirement income. Presumably, she won't need to keep saving after she has amassed the sum I suggested -- about $2 million. More important, she will only need about 7/8 of the $2 million I suggested she have, or (very roughly) $1.8 million. I apologize for my error, and I thank my readers for their invariably polite and thoughtful noting of my error.

If she wants to keep her income constant pre- and post-retirement (optimizing both sides), the correct answer is that she should save about 17%, not 20%. If we assume that she can get by on 85% of her pre-retirement (post-contribution) income, then she should save about 14% of her salary from age 40 going forward. This is -- I hope -- the correct calculation.

What to Do About High Gas Prices

Finally, these high gasoline prices. I hate them -- it costs me a fortune to fill my car. But it's no more President Bush's fault than is the price of Google or the price of copper or rubber. Nor is it the fault of the big energy companies -- they don't have a thing to do with the day-to-day price of oil. Oil is an international commodity. Its price is set in world markets by traders who work by greed and fear, like all traders. The federal government has very little to do with it at this point. Blaming Bush and Big Oil is just silly (see "Who's to Blame for High Oil and Gas Prices?").

But if we're smart, we will take a lesson. If $4-a-gallon gas is what we get when we have relative peace in the Middle East and huge, decade-long highs in inventories, what's the price going to be in 20 years?

Time to:

1. Urgently use ethanol (or other sources of alternative energy) when we can.
   
2. Annex Canada (just kidding!)
   
3. Use every bit of tax incentive we can to develop more oil fields instead of hammering the oil companies by threatening them with new taxes.
   
4. As individuals, families, businesses, and governments, conserve. Is this trip really necessary? Ask it, and it almost always answers itself.

Our fate, in the long run, is in our own hands, and if these are careful, prudent hands, we'll be fine. If we use our fingers just to point and blame, we will have no one to blame when we're running on empty.

How to Sell a Car

Furthermore, a word of praise. As I mentioned, I have a new car. It's pretty sporty but not large. A small but mighty Cadillac.  I don't drive it very much so it really doesn't matter a lot what mileage it gets.

A car salesman named Tom Borghi at a car dealership called Jessup in Cathedral City, Calif., sold it to me. I had earlier inquired about it at two other Caddy dealerships and been given a bit of the old runaround. He just drove it over, told me he could tell it was my kind of car, laughed and smiled, went over the car's merits, took me for a spin, and I signed on the dotted line at full price.

Now, it's a GM car, and if GM had a few more salespeople as eager to sell as Tom Borghi, GM would be riding high. Cars aren't bought. They're sold, and Tom could give some lessons. GM, are you listening?